Delta Corporation has the following capital structure: Debt (Kd) Preferred stock (Kp) Common equity (Ke) (retained earnings) Weighted average cost of capital (Ka) Capital structure size (X) million Capital structure size (Z) Cost (aftertax) 8.6% 6.8 10.2 million Weights 10% 20 7-0 a. If the firm has $49 million in retained earnings, at what size capital structure will the firm run out of retained earnings? Note: Enter your answer in millions of dollars (e.g., $10 million should be entered as "10". Weighted Cost .86% 1.36 7.14 9.36% b. Note: Enter your answer in millions of dollars (e.g., $10 million should be entered as "10".The 8.6 percent cost of debt referred to earlier applies only to the first $9 million of debt. After that the cost of debt will go up. At what size capital structure will there be a change in the cost of debt?

Delta Corporation has the following capital structure: a. If the firm has $49 million in retained earnings, at what size capital structure will the firm run out of retained earnings? Note: Enter your answer in millions of dollars (e.g., $10 million should be entered as " 10 ". b. Note: Enter your answer in millions of dollars (e.g., $10 million should be entered as " 10 ".The 8.6 percent cost of debt referred to earlier applies only to the first $9 million of debt. After that the cost of debt will go up. At what size capital structure will there be a change in the cost of debt